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Colloque international CLIOTOP-IMBER : Modéliser la demande globale en thon

14-15 avril 2011
jeudi 7 avril 2011 par Olivier Aumont

Modelling global demand for tuna

The modelling of global demand for tunas faces different challenges and unanswered questions having important policy implications for the management of fish stocks by Regional Fisheries Management Organisations.

Tuna markets for canned products have been found well integrated at the world-wide level, forming a single global and interdependent market (Sun 1999, Squires et al. 2006, Jeon et al. 2007, Jiménez-Toribio et al. 2010). Horizontal price linkages between the major marketplaces brought evidence of a spatially competitive industry. The interaction plays not only between countries, but also between the different species, like skipjack and yellowfin tuna (Jiménez-Toribio et al. 2010). Such a high degree of market integration is also reported on the sashimi-grade tuna market, dominated by the strong Japanese market (Sun 1998, Pan and Sun 2009). Distinct species such as bluefin, bigeye or even yellowfin tunas also seem to belong to the same market (Bose and Mc Ilgorn 1996). Between the two value chains (sashimi and canning), the fishing gears are distinct (respectively long-line and purse-seine), but the raw materials can stem from the same stocks (e.g. bigeye and yellowfin tunas). Consequently, a first issue concerns the degree of interaction between the sashimi and canned tuna markets, particularly in the long-run.

A second strand of research regards the relationship between market price and quantity. Manufacturers´ demand is considered price elastic (Bertignac et al., 2000 ; Chiang et al., 2001). The own-price elasticity of demand for frozen tuna by the canning industry has been estimated at -1.55 in the West and Central Pacific Ocean (Bertignac et al., 2000) and a similar value has been found for frozen yellowfin tuna in the Indian Ocean (Garcia del Hoyo, J.J. et al. 2010b). On the retailer-consumer side, demand of canned tuna was rather found inelastic on several European markets like France (-0.13 for canned tuna in brine ; Guillotreau et al. 2008), Spain (-0.39 for the whole domestic market of canned tuna ; García del Hoyo et al. 2010a) and the United Kingdom (Jaffry and Brown 2008), but not in the USA where a high own-price demand elasticity was estimated despite a high degree of differentiation (-1.67 for Starkist, -1.70 for Bumble Bee, -2.80 for Chicken of the Sea ; Daloonpate 2002) ; but US demand elasticity can be lower for domestic products than for imported ones (Babula and Corey 2005). Symmetrically, the price response of prices to the variability of catches showed a low level of flexibility (comprised between -0.05 and -0.20) in the case of Thailandese imports of frozen tuna caught by Taiwanese vessels (Sun and Hsieh 2000). However, the effects of changes in harvest levels on tuna prices are difficult to predict (Bertignac et al., 2000), presumably because of inventories which allows a certain power on prices for processors who can buy primary fish and store it when the market price is low in periods of high catches (Chiang et al. 2001). Because of the global nature of markets and beyond a local modification of catches, one could be interested by knowing the global price response (e.g. through the reference markets of Bangkok for the cannery-grade tuna, or Tokyo for the sashimi-grade tuna) to changes of aggregated catches at the worldwide level.

The consequences of these results (convergence of international prices, own-price and cross-price elasticities, price response to catch changes) are important in terms of policy implications. If demand for frozen tuna is evidenced as highly elastic and poorly flexible in prices, it would mean that the quantity effect dominates the price effect. In other words, any decline in catches due to over-exploitation or a policy measure of quota reduction would result in decreasing revenue for the fishing companies. Some states which do not enjoy a good bargaining position against the fishing companies can be tempted to let the Distant Water Fishing Nations use more intensively the resources located in their EEZ in order to maintain a good level of revenues. Other consequence : a local decline in catches may not have major consequences on the global market, but any change of prices in the reference market will have consequences for the global industry, and could even be used in rentsharing agreements between resource owners and fishing companies (Squires et al. 2006).

Although robust and quite consistent, the estimated results found in the literature indicate variability between studies, possibly explained by the wide variety of econometric methodologies : ordinary least squares, simultaneous equations, fixed effect models, cointegration approach, Vector error correction models, inverse Rotterdam almost ideal demand systems, structural dynamic models, transfer function models, network analysis, etc. The specifications are very different from a study to another, as well as the functional forms or the estimating methods. This international workshop on global tuna demand modelling has two objectives : to improve our empirical knowledge of tuna markets around the world in connection with management policy issues, and to discuss the most relevant econometric methods and specifications to model adequately tuna markets at the global scale.

Under the financial support of the ANR-project Macroes and NOAA, and in co-operation with the Cliotop-Imber programs, several international experts will be invited to participate to this workshop at the University of Nantes (western coast of France) on April 14-15, 2011.

More details are available in the following pdf document :

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